This quarterly economic forecast presents the medium-term outlook for the Canadian economy. This release focuses on government. For an overview of all major components of the economy, go to the Canadian Outlook main page.
Documents Highlights
- In these unprecedented economic times, the government has been an essential source of financial support for households and businesses.
- The federal government spent an estimated $280 billion in 2020 on recovery measures, primarily on income support programs.
- These essential measures do not come cheaply, however. Combined with the drop in tax revenues, the measures will see the deficit balloon to north of $385 billion, which is by far the largest in the country’s history.
- Despite the massive deficit, the federal government should remain in decent financial shape going forward provided this level of spending is temporary. The provinces, however, will struggle, as population aging means that they face mounting demand for health care and a revenue base that is weakening.
- Cities will also be in for a tough time, as they have few options to replace plummeting revenues. Provincial and municipal governments will be looking to the federal government for further financial assistance.
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